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India’s Trade Opportunities with LAC Countries

by Diplomatist Bureau - 15 July, 2023, 12:00 1434 Views 0 Comment

Way forward in the futuristic perspective

Trade and Investment Facilitation Services (TIFS) of PHDCCI organized an interactive Conference on “India’s Trade Opportunities with LAC Countries – Way forward in the futuristic perspective” on Tuesday, 11th July 2023 from 04.00 PM to 06.00 PM at PHD House, New Delhi.

Shri G. V. Srinivas, Additional Secretary (LAC), Ministry of External Affairs, GOI, highlighted the importance of leveraging technology to overcome the challenges and unlock the full potential of trade opportunities between India and Latin American Countries (LAC). There is a need to move away from inefficient, suboptimal offline methods and embrace technology to provide an informed platform for connecting businesses on both sides. Also, he emphasised the importance of identifying the right mediators and streamlining the process of connecting India and LAC businesses. He acknowledged the challenges posed by outdated directories, unreliable suppliers, and the need for comprehensive background research to ensure reliable and fruitful business engagements.

He pointed out that the Ministry of External Affairs, along with the PHD Chamber of Commerce and Industry, welcomes feedback and suggestions to enhance the utilisation of technology and improve connections between India and LAC countries.

Shri Dr. Akash Taneja, Additional DGFT, Ministry of Commerce and Industry, GOI, stated that despite geographical distances, both regions have built successful bilateral partnerships that exemplify South-South cooperation. He said that India and Latin America have emerged as new nerve centres of global trade in terms of production and consumption.

Also, he emphasised on the immense potential in the region, with countries like Brazil and Argentina offering vast land areas and a skilled workforce. The Indian diaspora is present in various Latin American countries, including Brazil, Paraguay, Guyana, and Suriname. These regions are rapidly growing as major importing economies, driven by robust domestic demand and economic competitiveness.

Shri Hemant Jain, Vice President, PHDCCI, stated that there has been a significant push for increased trade and investment between India and LAC countries. This trend creates the potential for collaboration between the two regions. The total trade volume between India-LAC region has risen from $29 billion in 2017-18 to $39 billion in 2023. Additionally, trade between India and the LAC region reached $39.6 billion in 2022-23. In order to further enhance trade and investment, it is advisable to pursue a Free Trade Agreement (FTA). Although some LAC countries have already signed a Preferential Trade Agreement (PTA), expanding it to an FTA would encourage even greater investment participation. An analysis of India’s trade pattern with the Latin American and Caribbean (LAC) region conducted by PHD Research Bureau of PHD Chamber of Commerce and Industry indicates that India’s merchandise trade with the LAC region has shown high growth of 35% in the post-pandemic years (2021-22 and 2022-23 average).

H.E. Mr. Juan Rolando Angulo Monsalve, Ambassador of Chile to India highlighted the similarities between Latin America and India in terms of diversity, size, population, and various cultural aspects. He emphasised that conducting business in the region requires understanding the specific expectations and characteristics of each country. With a population of 650 million, the region boasts diverse languages, cultures, and natural resources.

Shri R. Viswanathan, Latin America Expert, and Former Ambassador said that India’s trade relationship with Latin America holds significant growth potential for both region. He informed that last year, India’s exports to Latin America surged, with Honduras receiving $273 million and Guatemala $466 million in goods, surpassing exports to Cambodia and Kazakhstan, respectively.

Ms. Shamma Jain, Former Ambassador to Greece, Panama, Costa Rica & Nicaragua, and Cote d’Ivoire (Ivory Coast), Liberia, Sierra Leone, and Guinea in West Africa, highlighted the importance of the region amidst evolving geopolitical dynamics. She emphasised the significance of Latin America for trade, investments, and innovation. Ms. Jain revealed that India’s exports to Latin America reached nearly $50 billion last year, marking an impressive 19% increase.

Shri Veer Sagar, Chairman & CEO of Selectronic, emphasised the transformative power of technology in our lives, democratising access to its benefits. He highlighted that technology is breaking barriers and reaching everyone across various sectors. Sagar pointed out that India’s thriving startup ecosystem and advancements in IT position it as a hub for development.

Ms. Sofia Salas Monge, Minister Counsellor at the Embassy of Costa Rica in India, highlighted the trade and investment potential between India and Costa Rica. She informed that Costa Rica, strategically located in Central America, serves as a gateway to the Latin American and North American continents.

Shri Saurabh Sanyal, CEO & Secretary General, PHDCCI, in his formal vote of thanks said that there is a great window of opportunity for Indian companies to undertake more investments in sectors like Pharmaceuticals, IT and energy in LAC countries. Emerging areas of cooperation like renewables, electric mobility, energy, digitalisation and e-commerce would also provide much-needed trade diversification and access to new unexplored markets in the LAC region.

Dr. S P Sharma, Chief Economist | DSG, PHDCCI, who moderated the conference, stated that India is currently the fastest-growing economy among the leading economies. He further emphasised that it will continue to maintain this position for the next 5 years.

A report entitled “An Analysis of India’s Trade Pattern with Latin American and Caribbean Countries” was also released at the conference.

The Conference concluded with an extensive discussion of more than 3 hours with the participation of more than 70 delegates.

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